Appendix 8.1 January 23, /16 & 2016/17 General Rate Application. Power Smart Plan to SUPPLEMENTAL REPORT: 15yr (2014 to 2029)

Transcript

1 Power Smart Plan 2014 to 2017 SUPPLEMENTAL REPORT: 15yr (2014 to 2029)

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3 EXECUTIVE SUMMARY Manitoba Hydro s Power Smart Plan - 15 year supplemental report outlines the Corporation s demand side management program over the next 15 years, with some programs formally approved and placeholders used for those programs requiring further review and analysis. The Plan was developed through an intensive planning process which builds on the Corporation s experience and continuous involvement in demand side management since This plan builds upon and is consistent with the three year Power Smart Plan which was prepared in consultation with the Minister responsible for Manitoba Hydro. The 15 year plan is required to accommodate the Corporation s overall longer term business planning requirements, including developing an integrated resource plan. This supplemental report outlines the 15 year forecast of energy and demand savings, investments and cost effectiveness metrics to the benchmark year of 2028/29 which will be achieved through electricity and natural gas Power Smart Programs. The plan sets out to realize electricity savings of 1,136 MW and 3,978 GW.h, natural gas savings of 108 million cubic meters and combined global greenhouse gas emission reductions of 2.9 million tonnes by 2028/29. This activity represents 12.7% of the estimated electric load forecast offsetting 66% of projected load growth during this period and 5.3% of the estimated natural gas volume forecast by 2028/29, further reducing natural gas consumption in Manitoba. The total cost of achieving the energy savings is $978 million; $818 million of the costs are funded through the Corporation s Power Smart electricity budget, $130 million from the Power Smart natural gas budget, $11 million from the Affordable Energy Fund and $19 million from the Furnace Replacement budget for targeting furnace replacement. Combined with energy savings achieved to date, total electrical savings of 1,635 MW and 6,286 GW.h and total natural gas savings of 211 million cubic meters will be realized by 2028/29. These combined energy savings are expected to result in an overall reduction of greenhouse gas emissions of 4.6 million tonnes by 2028/29. This activity represents 20.1% of the estimated electric load forecast and 10.2% of the estimated natural gas volume forecast by 2028/29. It is expected that by 2028/29, a cumulative investment of achieving the energy savings will have been $1.6 billion dollars, $1.3 billion of the costs are funded through the Corporation s Power Smart electricity budget, $232 million from the Power Smart natural gas budget, $37 million from the Affordable Energy Fund, $27 million from the Furnace Replacement budget for targeting furnace replacement. By reducing electricity and natural gas consumption through innovative products, participating customers can expect to save $191 million in 2028/29 and $1.7 billion cumulatively by 2028/29. When combined with bill reductions to date, Power Smart programs are expected to save participating customers $277 million in 2028/29 and over $4.3 billion dollars cumulatively by 2028/29. The overall Societal Cost (SC) and Total Resource Cost (TRC) metrics for the electric and natural gas Power Smart portfolio is 2.2 and 2.0, respectively. The electric Power Smart portfolio has an overall TRC of 2.2, RIM of 1.0 and an overall levelized utility cost of 1.8 cents per kilowatt-hour. The natural gas Power Smart portfolio has an overall TRC of 1.1, RIM of 0.5 and an overall levelized utility cost of 18.6 cents per cubic meter. Excluding the Affordable Energy Program, the natural gas Power Smart portfolio has an overall levelized utility cost of 13.5 cents per cubic meter. i

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5 EXECUTIVE SUMMARY... I 1 THE POWER SMART PLAN Introduction DSM Market Transformation Strategy Power Smart Programs Economic Assumptions DEMAND SIDE MANAGEMENT DSM Targets Electric and Natural Gas DSM Savings Other Fuel Savings Energy Efficient Codes, Standards & Regulation Savings DSM Utility Investment Internal Sources External Sources DSM Metrics and other related measurements Integrated Perspective Utility Perspective Customer Perspective ii

6 APPENDIX A Power Smart Plan Electric Appendix A.1 - Annual Capacity Savings (MW) Appendix A.2 - Annual Energy Savings (GW.h) Appendix A.3 - Annual Utility Costs Appendix A.4 - Annual Program Administration Costs Appendix A.5 - Annual Program Incentive Costs APPENDIX B - Historical Electric Savings & Costs Appendix B.1 - Annual Capacity Savings (MW) Appendix B.2 - Annual Energy Savings (GW.h) Appendix B.3 - Annual Utility Costs Appendix B.4 - Annual Program Administration Costs Appendix B.5 - Annual Program Incentive Costs APPENDIX C Power Smart Plan Natural Gas Appendix C.1 - Annual Energy Savings (million m 3 ) Appendix C.2 - Annual Utility Costs Appendix C.3 - Annual Program Administration Costs Appendix C.4 - Annual Program Incentive Costs APPENDIX D - Historical Natural Gas Savings & Costs Appendix D.1 - Annual Energy Savings (million m 3 ) Appendix D.2 - Annual Utility Costs Appendix D.3 - Annual Program Administration Costs Appendix D.4 - Annual Program Incentive Costs APPENDIX E - Program Evaluation Criteria Nature of Electricity and Natural Gas Markets Program Categories Economic Effectiveness Metrics Other DSM Program Assumptions 3

7 1 THE POWER SMART PLAN 1.1 Introduction Manitoba Hydro s Power Smart Plan 15 year supplemental report outlines the Corporation s demand side management program over the next 15 years, with some programs formally approved and placeholders used for those programs requiring further review and analysis. The Plan was developed through an intensive planning process which builds on the Corporation s experience and continuous involvement in demand side management since This plan builds upon and is consistent with the three year Power Smart Plan which was prepared in consultation with the Minister responsible for Manitoba in accordance with the Energy Savings Act. The 15 year plan is required to accommodate the Corporation s overall longer term business planning requirements, including developing an integrated resource plan. Manitoba Hydro s DSM plan is an input to the development of the Corporation s Integrated Power Resource Plan. To support this process, the Corporation prepares a 15 year forecast which is reviewed and updated annually to reflect current market information and trends. This supplemental report outlines the 15 year forecast underpinning the approved Power Smart Plan and includes the long term forecasts of energy and demand savings, budgets and cost effectiveness metrics. 4

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9 1.2 DSM Market Transformation Strategy Manitoba Hydro s DSM strategy is to aggressively pursue all cost effective energy efficiency opportunities and continually monitor the market to identify emerging trends and opportunities which may become viable and cost effective DSM initiatives within the planning horizon with the end goal of creating a sustainable market change where the energy efficient technology or practice ( EE measure ) becomes the market standard. To accomplish this in a manner that ensures permanent market transformation to the EE measure is achieved, a long term and comprehensive approach is used that involves different market intervention strategies at the various stages of the EE measure s adoption into the market. These strategies are researched and designed using a collaborative approach considering the input and expertise of the entire delivery channel for the EE measure including designers, suppliers, retailers and target customers. 5

10 Infancy When an EE measure is first introduced to the market, it is typically received with skepticism on the part of installers, facility owners and consumers. The market is also often characterized by limited availability of the product, higher costs and, in many cases, unverified or untested energy performance claims. These conditions make it difficult to develop and increase market acceptance for the product. Lack of informed suppliers or experienced installers is also an issue with some EE measures, as many industry participants prefer to retain their own tried and true supply chain and installation methods. It is of utmost importance in this phase that these barriers are addressed otherwise the EE measure will face difficulty with achieving market penetration and may fail to enter the growth stage. Market Intervention Strategies: Research and Development including possible demonstrations project showcasing the EE technology are important to demonstrate the performance claims for the measure and possibly to even highlight areas where the EE measure can be improved. For technologies related to space and water heating in particular, local field demonstration experience can be critical to increasing acceptance, due to Manitoba s climate differences from typical laboratory or field testing. Demonstrations also have additional benefits through the ability to become showcases for the purpose of education and a future basis for communications that incorporate real world experiences that installers and customers can identify with operational performance. If the energy performance of the EE technology is already known or has been verified through research and demonstration, communication strategies focusing on education to the market are critical to building awareness of the EE measure and its benefits. Policy relating to energy efficiency is a very powerful strategy for EE measures in the infancy stages as it encourages government stakeholders to be to become leaders with energy efficiency and be the early adopters of the new technology. Early adopters are critical to the successful launch of new EE measures as they help to build the base industry infrastructure by creating initial demand. Growth Once the barriers of the Infancy stage have been identified and a strategy to address the barriers has been successfully implemented for the EE measure, market penetration begins to rise, whether voluntarily or through a policy strategy. In the early stages of growth, there needs to be a balanced approach to creating demand for the measure while ensuring that the market has developed qualified and knowledgeable providers in order to meet the emerging demand. EE measures in early growth can face irreparable damage if the early majority adopters lose confidence in the measure due to performance that does not meet expectations. At this stage, the product efficiency performance is established with energy benefits to the customer quantified and the non-energy benefits have been identified. However, there will still be a lack of knowledge in the market as to the optimum methods of realizing these benefits. 6

11 During later periods of the growth stage, installers and suppliers become more plentiful, there may be customers with years of successfully implementing the EE measure, and there is increased awareness of the existence of the product. Through the majority of the growth phase, a first cost premium typically remains associated with the EE measure. Power Smart can have a significant impact on the rate at which a product is adopted in the market regardless of the form of the program or support offered due to the immense trust that industry and consumers have in Manitoba Hydro s expertise in matters pertaining to energy efficiency. Market Intervention Strategies: The strategies that are employed during this phase are dependent upon the characteristics of the market the technology is directed toward, the magnitude and significance of the additional cost to the market, and the breadth of accommodation that must be made in order to effectively utilize the technology. Strategies can vary drastically not only by market segment but also by specific technology. A thorough understanding of the market, both overall characteristics and drivers and detractors to the EE measure, is essential to ensure that the program design is addressing the proper target market and contains the tools and strategies that will address the barriers present. Marketing and communication strategies focus on comprehensive messaging that includes both the efficiency benefits and the non-energy benefits that have been attributed to the measure, and that have a perceived value to the intended target market, in order to maximize the market adoption. With first cost still a barrier, many programs will utilize financial tools such as incentives and/or financing to encourage customer adoption of the measure. The specific tool used or the extent to which the program covers the incremental cost of the measure will vary by technology and by target market and, once again, involves consultation with the channel participants to determine the optimal contribution by Power Smart. Equally as important to the more visible customer directed strategies are capacity building initiatives. These strategies can be especially important for those EE measures that rely on professional consultants or installers for implementation and include training, education, and certification of groups such as homebuilders, equipment installers, engineers, architects, retailers, and distributors. In assessing options for pursing a Power Smart program to support an EE measure, Manitoba Hydro uses a number of metrics as guidelines to assess the opportunities. These metrics assist in determining whether to pursue an opportunity, how aggressive an opportunity will be pursued, the effectiveness of program design options and the relative investment sharing between ratepayers and participating customers. 7

12 Maturity At the maturity phase of the EE measure s life cycle, the measure s use has become the preferred installation for the majority of the installers and customers in the market. At this stage volumes have increased to the point that prices are reduced to the same level as the technology that is being replaced, or the price of the technology is in alignment with the value perceived by the customer. With these conditions, program participants often are qualified as free riders ; in other words, they would have adopted the measure even in the absence of a program so the incentive they received was not responsible for achieving their energy savings. Market Intervention Strategies: During this phase, Manitoba Hydro s strategy involves pursuing the remaining opportunities through the adoption of codes and regulations. A code or a regulation ensures permanent market transformation for the specific energy efficiency opportunity since a potential always exists that the market could revert back to the non-efficient option once Power Smart has reduced or eliminated its program support. Manitoba Hydro is heavily engaged in both Federal level and Provincial level committees that work to establish ongoing updates to minimum energy performance standards for technologies and to determine the appropriateness of their adoption into a code or a regulation. The assessment of the most appropriate exit strategy for a technology is strategized as early as at the infancy phase of the adoption life cycle of the EE measure where possible. 8

13 1.3 Power Smart Programs The following table provides program durations and cumulative participation for incentive based and financial loan programs over the 15 year planning horizon. For program descriptions, please refer to the current approved DSM plan ( Power Smart Plan). For programs not approved but where placeholders are used, detail program descriptions are not available at this time. Program Duration and Cumulative Participation 2014/ /29 Programs Program Category Electric Natural Gas Program Launch Date Particpation Definition Cumulative Participation by 2028/29 Residential New Home Program Incentive Based Apr-2017 No. of houses 1,772 Home Insulation Program Incentive Based May-2004 No. of houses 25,220 Water and Energy Saver Program Incentive Based Sep-2010 No. of houses 335,484 Affordable Energy Program Incentive Based Dec-2007 No. of retrofits 24,025 Refrigerator Retirement Program Incentive Based Jun-2011 No. of appliances 31,000 Residential LED Lighting Program Incentive Based Apr-2014 No. of bulbs 328,658 Community Geothermal Program Incentive Based Apr-2013 No. of geothermal systems 5,885 Power Smart Residential Loan Financial Loan Feb-2001 No. of loans 90,000 Power Smart PAYS Financing Financial Loan Nov-2012 No. of loans 7,673 Residential Earth Power Loan Financial Loan Apr-2002 No. of loans 335 Commercial Commercial Lighting Program Incentive Based Apr-1992 No. of projects 7,315 LED Roadway Lighting Conversion Program Incentive Based Apr-2014 No. of conversions 129,550 Commercial Building Envelope - Windows Program Incentive Based Dec-1995 No. of projects 3,774 Commercial Building Envelope - Insulation Program Incentive Based Dec-1995 No. of projects 4,975 Commercial Geothermal Program Incentive Based Dec-1995 No. of buildings 1,069 Commercial HVAC Program - Boilers Incentive Based Sep-2003 No. of boilers 259 Commercial HVAC Program - Chillers Incentive Based Sep-2003 No. of chillers 89 Commercial HVAC Program - C02 Sensors Incentive Based Apr-2009 No. of sensors 3,339 Commercial HVAC Program - Water Heaters Incentive Based Apr-2015 No. of water heaters 462 Commercial Custom Measures Program Incentive Based Dec-1995 No. of projects 317 Commercial Building Optimization Program Incentive Based Apr-2006 No. of buildings 138 New Buildings Program Incentive Based Apr-2009 No. of buildings 195 Commercial Refrigeration Program Incentive Based Apr-2006 No. of locations 3,378 Commercial Kitchen Appliance Program Incentive Based Jan-2008 No. of appliances 5,240 Network Energy Management Program Incentive Based May-2008 No. of licenses 38,944 Internal Retrofit Program Incentive Based Jul-1995 No. of projects 174 Power Smart Shops Incentive Based Feb-2009 No. of projects 5,057 Power Smart for Business PAYS Financing Financial Loan Sep-2013 No. of loans 328 Industrial Performance Optimization Program Incentive Based Jun-1993 No. of projects 2,254 Industrial Natural Gas Optimization Program Incentive Based Sep-2006 No. of projects 48 Load Management Curtailable Rate Program Incentive Based Nov-1993 No. of customers 45 ^ Load Displacement & Alternative Energy Bioenergy Optimization Program Incentive Based Mar-2006 No. of projects 54 Customer Sited Load Displacement Incentive Based Apr-2014 No. of customers 61 * Participation recurs annually 9

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15 1.4 Economic Assumptions Marginal Costs The Power Smart Plan 15 year supplemental report incorporated the following forecasts to estimate the marginal benefits for energy savings resulting from the revenue realized from conserved electricity being sold in the export market, the avoided costs of new transmission and the supply of natural gas: - Electric The electric marginal cost forecast was prepared and compiled by the Resource Planning and Market Analysis Department. Marginal values were provided for savings at the distribution level, transmission level, generation level and for the value of curtailable load. For the Power Smart Plan - 15 year supplemental report, the following assumptions were applied: - Marginal costs were based on a uniform supply with a 100% capacity factor - Distribution Level Programs used a loss factor of 14% to translate back to generation - General Service Large Programs used a loss factor of 10% to translate back to generation - Generation Level Programs used a loss factor of 14% to translate to distribution level - US/Cdn Exchange Rates and Escalation Factors were derived from the Corporation s G911 corporate policy document issued August 13 th, Transmission & distribution marginal costs were updated using SPD 2010/02 - Natural Gas The marginal cost forecast for natural gas was prepared based on the natural gas price forecast which was provided by the Economic Analysis Department. Unlike the price forecast, it does not include distribution costs. The benefits of avoided greenhouse gas emissions were included in the natural gas marginal benefits used to calculate the Societal Cost (SC) and Total Resource Cost (TRC) metric. A greenhouse gas cost forecast was provided by the Energy Policy & Analysis Department. - In addition, water benefits were calculated based on 2014 City of Winnipeg Water and Sewer rates effective April 1 st,

16 Customer Rates The following forecasts were used to determine the impact of customer bill reductions resulting from their Power Smart energy savings: - Electric The Electric Rates & Regulatory Department provided the rate forecast for electricity. Commercial and industrial program rates were determined by a weighted average based on the forecast participation by each of the Corporations billing classes. Residential rates were consistent for all residential programs. For the Power Smart Plan - 15 year supplemental report, the weighted rates were based on the approved May 1 st, 2013 rate forecast which assumed the 2014/15 real rates would increase by 1.9% and thereafter by 1.9% per year. This was based on the projected rate increase of 3.95% for 2014/15 and the long term rate increase of 3.95% per year (as per IFF-12) less the 2014/15 escalation rate of 2.0 % and the long term escalation rate of 2.0% (2012 Economic Outlook), (represented in 2014 $). - Natural Gas The natural gas price forecast was prepared by the Economic Analysis Department with input from the Energy Price Outlook. For the Power Smart Plan - 15 year supplemental report, the following assumptions were applied: - Forecast starting point was the February 1 st, 2013 rate - Commodity price changes into the future were based on the forecast of natural gas prices contained in the Energy Price Outlook which represented a consensus view of futures markets and a suite of five independent forecasting organizations - Non-commodity (monthly charge, transportation, distribution) price changes were based on IFF-12 assumptions on general rate increases and the Economic Outlook assumptions on Manitoba inflation. Non-commodity price changes in the post-iff period were based on historical trends Economic Variables For the Power Smart Plan - 15 year supplemental report, the Projected Escalation, Interest, & Exchange Rates G911 corporate policy document issued August 13 th, 2013 was used to discount all forward-looking savings and costs. The real weighted average cost of capital of 5.4% was used to discount real dollar cash flows and energy savings. Rates for all historical benefits, costs, and energy savings used actual economic results for each year. 11

17 2 DEMAND SIDE MANAGEMENT 2.1 DSM Targets Electric and Natural Gas DSM Savings In summary, the plan sets out to realize electricity savings of 1,136 MW and 3,978 GW.h, natural gas savings of 108 million cubic meters and combined global greenhouse gas emission reductions of 2.9 million tonnes by 2028/29. This demand side management plan represents 12.7% of the estimated electric load forecast offsetting 66% of projected load growth during this period and 5.3% of the estimated natural gas volume forecast by 2028/29, further reducing natural gas consumption in Manitoba. Cumulative DSM Electric Savings as a % of Annual Load 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 12.7% Note: Total DSM Electric savings per the above graph includes forecast savings from program impacts and savings from Codes, Standards and Regulations. Source of Load Forecast: 2013 Electric Load Forecast 8.0% Cumulative DSM Natural Gas Savings as a % of Annual Volume 6.0% 5.3% 4.0% 2.0% 0.0% Note: Total DSM Natural Gas savings per the above graph includes forecast savings from program impacts and Codes, Standards and Regulations Source of Natural Gas Volume Forecast: 2013 Natural Gas Volume Forecast Combined with energy savings achieved to date, total electrical savings of 1,635 MW and 6,286 GW.h and total natural gas savings of 211 million cubic meters will be realized by 2028/29. These combined energy savings are expected to result in an overall reduction of greenhouse gas emissions of 4.6 million tonnes by 2028/29. This activity represents 20.1% of the estimated electric load forecast and 10.2% of the estimated natural gas volume forecast by 2028/29. 12

18 The following charts graphically represent the capacity, electric energy and natural gas energy savings achieved to date and the savings anticipated from future DSM activity for the Power Smart Plan - 15 year supplemental report: 1,800 1,600 1,400 Annual DSM Capacity Savings 1989/ /29 1,635 MW Generation) 1,200 1, Activity To 2013/ Power Smart Plan 7,000 6,000 Annual DSM Energy Savings 1989/ /29 6,286 GW.h Generation) 5,000 4,000 3,000 2,000 1,000 Activity To 2013/ Power Smart Plan 250 Annual DSM Natural Gas Savings 1989/ / M m 3 (million m 3 ) Activity To 2013/ Power Smart Plan 13

19 The following table shows detailed DSM savings associated with the Power Smart Plan - 15 year supplemental report by sector to 2028/29. Electric and Natural Gas DSM Savings 2014/ /29 Annual Capacity (MW) Annual Energy (GW.h) Annual Energy (million m 3 ) Residential New Home Program Home Insulation Program Water and Energy Saver Program Affordable Energy Program Affordable Energy Program - Insulation Affordable Energy Program - Furnace n/a n/a 0.0 Affordable Energy Program - Total Refrigerator Retirement Program Residential LED Lighting Program Community Geothermal Program Residential Programs Total (@ Meter) % % % Customer Service Initiatives / Financial Loan Programs Power Smart Residential Loan Power Smart PAYS Financing Residential Earth Power Loan Residential CSI / Financial Loan Programs Total (@ Meter) 9.7 1% % % Commercial Commercial Lighting Program LED Roadway Lighting Conversion Program n/a Commercial Building Envelope - Windows Program Commercial Building Envelope - Insulation Program Commercial Geothermal Program n/a Commercial HVAC Program - Boilers n/a n/a 4.7 Commercial HVAC Program - Chillers n/a Commercial HVAC Program - CO2 Sensors Commercial HVAC Program - Water Heaters n/a n/a 0.7 Commercial Custom Measures Program Commercial Building Optimization Program New Buildings Program Commercial Refrigeration Program Commercial Kitchen Appliance Program Network Energy Management Program Internal Retrofit Program Power Smart Shops Commercial Programs Total (@ Meter) % % % Customer Service Initiatives / Financial Loan Programs Power Smart For Business PAYS Financing Commercial CSI / Financial Loan Programs Total (@ Meter) 0.6 0% 2.3 0% 0.1 0% Industrial Performance Optimization Program n/a Natural Gas Optimization Program n/a n/a 4.8 Industrial Programs Total (@ Meter) % % % Energy Efficiency Subtotal (@ Meter) % 1, % % Load Management Curtailable Rate Program n/a n/a Load Management Programs Total (@ Meter) % n/a 0% n/a 0% Load Displacement & Alternative Energy Bioenergy Optimization Program Customer Sited Load Displacement n/a Load Displacement & Alt. Energy Programs Total (@ Meter) % % 1.7 5% Conservation Rates Conservation Rates - Residential n/a Conservation Rates - Commercial n/a Conservation Rates Total % % n/a 0% Fuel Choice Fuel Choice (38.8) Fuel Choice Total % % (38.8) (120%) Program Impacts Total (@ Meter) % 2, % % Interactive Effects (2.2) Codes, Standards and Regulations (@ Meter) , Power Smart 2014/15 to 2028/29 Impacts (@ Meter) 1,007 3,525 Power Smart 2014/15 to 2028/29 Impacts (@ Generation) 1,136 3, Savings Achieved To 2013/14 (@ Meter) 442 2,043 Savings Achieved To 2013/14 (@ Generation) 500 2, Grand Total (@ Meter) 1,448 5,568 Grand Total (@ Generation) 1,635 6,

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21 2.1.2 Other Fuel Savings Through funding from the Affordable Energy Fund, residential customers using heating sources other than natural gas and electricity are eligible to participate in the Home Insulation, Water & Energy Saver and Oil & Propane Furnace Replacement programs. The following table provides the oil and propane fuel savings estimated to be achieved through this funding. It is estimated that savings of 399,400 litres of fuel oil and 180,700 litres of propane will be achieved from 2014/15 to 2028/29. Affordable Energy Fund Other Fuel Savings 2014/ /29 (000s, litres) 2014/ / / /29 Fuel Oil Savings Home Insulation Program Water & Energy Saver Program Oil & Propane Furnace Replacement Annual Fuel Oil Savings Cumulative Fuel Oil Savings, 2014/ / Propane Savings Home Insulation Program Water & Energy Saver Program Oil & Propane Furnace Replacement Annual Propane Savings Cumulative Propane Savings, 2014/ /

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23 2.1.3 Energy Efficient Codes, Standards & Regulation Savings Many Canadian and U.S. electric utilities, including Manitoba Hydro, have been engaged in DSM activities for more than two decades. In addition to utility specific DSM programs, Manitoba Hydro s strategy to affect change in codes and standards involves being an aggressive and active participant and, in many cases, a driving force on a number of provincial and national energy efficiency codes and standards committees. These codes and standards are subsequently referenced in national and provincial regulations that mandate minimum energy performance levels for a variety of appliances, buildings and other energy consuming measures. The focus of Manitoba Hydro s efforts on these committees is to advance the progress of product efficiency improvements through the development of test methodologies that facilitate measurement and comparison of energy performance and provide for minimum energy performance levels that reasonably represent performance improvements available from commercially viable product advancements, which are then incorporated into Manitoba Power Smart programs, and subsequent energy efficiency regulations and building codes proposed by national and provincial regulators. Not all codes and standards are regulated, with some codes and standards being developed for the purpose of supporting good business practices that assist customers in quantifying and comparing the energy performance of measures being considered for implementation. In these instances, Manitoba Hydro supports the adoption of such non-regulated codes and standards within its Power Smart programs. Manitoba Hydro annually prepares a forecast of the expected influence of both regulated and nonregulated codes and standards, and since 1995 this forecast has been used to adjust Manitoba Hydro s system load forecast. Strategic Steering Committee on Performance, Energy Efficiency and Renewables Manitoba Hydro is a leading contributor on the Canadian Standards Association s Strategic Steering Committee on Performance, Energy Efficiency and Renewables (SCOPEER). This Canadian Standards Association committee, with participation from federal and provincial authorities, electric utilities, industry associations and equipment suppliers, provides oversight and governance for the process used to develop energy performance standards and establish minimum energy performance levels for energy consuming measures across most residential, commercial and industrial sectors. SCOPEER includes Technical Committees responsible for specific end-use technology areas, including Heating, Ventilation, Air Conditioning and Refrigeration Equipment (TC 401), Industrial Equipment (TC 402), Residential Equipment (TC 403), Lighting Equipment (TC 419), Solar Equipment (TC 420) and Energy Management (TC 422). Individual Technical Subcommittees operating within each of the Technical Committees are responsible for the development of specific standards related to the energy performance of end-use measures that are vetted and approved by the SCOPEER committee for adoption. Electric utilities, equipment suppliers and consumer reference these standards within their programs and specific areas of activity, while regulatory agencies at the national and provincial level adopt these standards and their associated minimum energy performance levels into energy efficiency regulations. 16

24 Energy Savings from Codes & Standards In many markets, the most effective and permanent form of market transformation for energy efficient technologies and practices is the regulation of energy efficient codes and standards as such regulations ensures that customers do not revert to less efficient technologies/practices once the incentives and/or promotional activities are discontinued. Consequently, the process of achieving these changes is complex and lengthy as it involves many stakeholders, varying environmental and market conditions and market acceptance to ensure successful implementation. Efforts to achieve energy savings through Energy Efficient Codes and Standards initiatives are forecasted in the Power Smart Plan - 15 year supplemental report to achieve capacity savings of 419 MW, energy savings of 1273 GW.h and 84 million cubic meters of natural gas annually by 2028/29. As a result of these savings, a greenhouse gas emissions reduction of 1.0 million tonnes is expected by 2028/29. 17

25 The following table and charts provide a summary of the planned energy savings in 2028/29 from codes and standards that currently implemented in energy efficiency regulation at the provincial and national level. Future DSM plans will provide updated forecasts of savings from codes and standards based on new information, such as the pending proposals being put forward by Natural Resources Canada for Amendments 13 and 14, which include both new or enhanced energy efficiency regulations for a variety of energy consuming measures. Energy Savings from Codes & Standards 2014/ /29 Code Energy and Demand Savings Natural Gas CO2 Reductions Category Components Winter MW Annual GW.h Annual millions m 3 Annual Tonnes Residential Construction Insulation, Windows, Pilot Light Gas Fire Place, Furnance, Heat Recovery Ventilation, Showerhead ,601 Residential Lighting General Service Lamps ,418 Residential Appliances Other Residential Equipment Dishwashers, Clothes Washers, Clothes Dryers, Refrigerators, Freezers, Ranges, Stoves, Cooktops ,453 Electric Hot Water Tank, Central Air Conditioning, Residential Furnace ,023 Commercial New Construction Various Building Code Amendments ,407 Commercial Lighting Other Commercial Equipment General Service Lamps, Exit Signs, Fluorescent Lamp Ballasts ,105 Commercial Furnace, Boiler and Spray Valves ,897 Generation ,019,905 * Totals per above include savings attributed to specific Power Smart programs and thus differ from Codes and Standards savings reported in Appendices A.1, A.3 and C Electric Codes & Standards By Category (GW.h) Residential Construction Residential Lighting Residential Appliances Other Residential Equipment Commercial New Construction Commercial Lighting Other Commercial Equipment Natural Gas Codes & Standards By Category (million m 3 ) Residential Construction 0.5 Other Residential Equipment Commercial New Construction 57.7 Other Commercial Equipment 18

26 Status of Codes and Standards The following table summarizes the status of changes to provincially and nationally regulated codes and standards included in the Power Smart Plan - 15 year supplemental report, including actual or expected dates for implementation. For electricity, changes that account for 67% of total energy savings have been enacted and 33% are planned. For natural gas, changes that account for 64% of total energy savings have been enacted and 36% are planned. Status of Changes to Codes and Standards Code Category Components Energy Natural Gas Level of Expected Effective Date Annual GW.h Annual million m 3 Government Enacted Announced Planned Residential Construction Building Code - Insulation MB 2008 Residential Construction Building Code - Various measures MB 2010 Residential Construction Building Code - Various measures MB 2020 Residential Lighting General Service Lamps (MEPS) Federal 2014 Residential Appliances Various appliances Federal Other Residential Equipment Electric Hot Water Tank Federal 2004 Other Residential Equipment Central Air Conditioning Federal 2006 Other Residential Equipment Residential Furnace Federal / MB 2009 Commercial New Construction Building Code MB 2017 Commercial Lighting General Service Lamps (MEPS) Federal 2014 Commercial Lighting Exit Signs Federal 2004 Commercial Lighting Fluorescent lamp ballasts (New / Reno) Federal 2006 / 2010 Other Commercial Equipment Commercial Furnace Federal / MB 2009 Other Commercial Equipment Commercial Boilers Federal / MB 2016 Other Commercial Equipment Commercial Spray Valves Federal / MB 2011 Total (GW.h) % 0% 33% Total (million m 3 ) % 0% 36% 19

27 Code, Standard & Regulation Descriptions The following section describes each of the codes and standards listed in the Summary Table noted in Section that have been taken into consideration when developing a forecast for projected savings. Residential Construction Building Code Manitoba Building Code, amendment (PROVINCIAL) Regulation 4/2008 Registered: January 11, 2008 Effective date: October 1, 2008 Manitoba Hydro has been offering the Power Smart New Home program to customers across the province since The New Home program promoted and offered incentives to customers for the installation of energy efficient technologies and building practices within the New Home construction industry. Manitoba Hydro worked closely with industry stakeholders like the Manitoba Home Builders Association when developing requirements for the program. Specifically, the Power Smart New Home program has required and been promoting a minimum requirement for R20 insulation in the foundation walls of new homes since Changes to Table (Minimum Thermal Resistance for the Building Envelope) of the Manitoba Building Code (Regulation 127/2006) came into effect on October1, The changes related to the minimum requirement for insulation R-value for the interior and exterior foundation walls of new homes. The code change increased the minimum required insulation value from R12 to R20. Building Code Manitoba Building Code, amendment (PROVINCIAL) Regulation 142/2010 Registered: October 4, 2010 Effective date: December 1, 2010 Manitoba Hydro has promoted energy efficient technologies and building practices within the residential new construction segment through delivery of the Power Smart New Home Program. When developing program requirements, Manitoba Hydro worked closely with industry stakeholders like the Manitoba Home Builders Association. Through the delivery of the Power Smart Gold Home offering, Manitoba Hydro planned to aid the advancement of future building code by promoting and offering incentives to customers to build their home with Power Smart recommended technologies and construction practices. The Gold standard announced in 2007 required the use of heat recovery ventilators (HRV), 94 % AFUE furnaces, electronic ignition for natural gas fireplaces, R50 attic insulation, water efficient fixtures and many other building envelope improvements. 20

28 Effective December 1st, 2010, Manitoba implemented changes to the building and plumbing codes that increased energy and water efficiencies. These changes were the result of extensive consultations by the Office of the Fire Commissioner involving new homebuilders, contractors and technical experts. The new efficiencies incorporated into new construction and homes undergoing extensive renovations included: - specifying minimum energy-efficiency requirements for windows, - eliminating the pilot light in gas fireplaces, - increasing the required level of attic insulation to R50, - requiring a minimum 94 per cent fuel-efficiency rating for furnaces, - specifying a mid-efficient heat-recovery ventilator, and - introducing energy-modeling software that will allow builders to model alternatives to the code requirements. - Requiring a maximum flow rate for primary showerheads to 1.75 GPM Through its close working relations with key industry stakeholders and the Power Smart New Home Program offering, Manitoba Hydro succeeded in advancing these changes to the Manitoba Building code. In fact, a majority of the technologies adopted by the Manitoba Building Code for the December 1, 2010 update were part of the aforementioned Power Smart Gold Home standard requirements. Without the program providing information, education, training, and incentives for these technologies and building practices, the industry would have been less likely to adopt these technologies and transform the market. The program created demand for these technologies, provided builders an opportunity to gain experience using them, and provided trades and contractors training opportunities to advance their expertise and knowledge of the technologies. Building Code Manitoba Building Code, amendment (PROVINCIAL) Regulation (Proposed) Effective date: 2020 Manitoba Hydro is currently assessing the Power Smart New Home program. The program will promote and offer incentives to customers for the installation of energy efficient technologies and building practices within the New Home construction industry. Manitoba Hydro will work closely with industry stakeholders with the aim to build market acceptance of Power Smart New Home technologies for ease of adoption in the Manitoba Building Code in

29 Residential Lighting General Service Lamps National Resources Canada (FEDERAL) Amendment 12B to Energy Efficiency Regulations Published: January 15, 2014 (Canada Gazette Part II) Effective date(s): January 1 st, to 100 watt equivalent lamps December 31 st, to 60 watt equivalent lamps The Government of Canada announced in Amendment 12B to the Energy Efficiency Regulations, published on January 15, 2014 that they would introduce Minimum Energy Performance Standards (MEPS) for general service lamps in The consequent Regulations came into force in December 2013 and applied to 100 and 75 W bulbs manufactured on or after January 1, 2014, and to 60 and 40 W bulbs manufactured on or after December 31, The Regulations prohibit the importation and interprovincial shipment of non-compliant products. The Regulations provide for a number of alternatives to inefficient bulbs. Where no alternatives exist, exemptions are made. 22

30 Residential Appliances Manitoba Hydro is a key player on the Canadian Standards Association s Strategic Steering Committee on Performance, Energy Efficiency and Renewables (SCOPEER). This committee is responsible for changes to provincial and national performance standards and legislation which have resulted in the improvement of energy utilization of numerous appliances such as dishwashers, clothes washers & dryers, refrigerators and freezers, and ranges/stoves/cooktops. Other Residential Equipment Hot Water Tank Standby Losses National Resources Canada (FEDERAL) Amendment 8 to Energy Efficiency Regulations Test Standard: CAN/CSA-C Published: September 22, 2004 (Canada Gazette Part II) Effective date(s): July 1, 2004 Standby heat loss is the heat lost and energy wasted by heating water and storing it in a tank such as the case with traditional tank hot water heaters. That is, heat leaches from the tank to the surrounding air, causing the heater to heat up the water again Storage water heater models with heavily insulated tanks can significantly reduce heat loss. In 2004, the CSA published a standard (C191-00) which specified requirements related to delivery, minimum standby performance, heater element ratings, and marking of electric storage tank water heaters. For standards, standby heat loss savings are based on the water heated for use by dishwashers and clothes washers. Central Air Conditioning National Resources Canada (FEDERAL) Amendment 9 to Energy Efficiency Regulations Test Standard: CAN/CSA-C Published: November 15, 2006 (Canada Gazette Part II) Effective date(s): November 15, 2006 In November 2006, the CSA published a standard (C656-05) which specified mandatory MEPS applied to permanently installed air-source air-conditioner and heat pumps. Equipment types include air conditioners and heat pumps that are single package and split system, single and threephase, with rated capacity of less than 19 kw (65,000 Btu/h). For air conditioners, a minimum SEER rating of 13 was mandated. Manitoba Hydro provides a fixed interest finance plan that may be used for renovations including central air, mid-efficient natural gas/electric furnaces and water heaters, direct vent natural gas fireplaces, security lights and fixtures under the Energy Finance Plan. Pre 2005, a minimum SEER rating of 10 for Air Conditioners was required for eligibility for financing under the plan. In order to comply with the forthcoming national standard, Manitoba Hydro raised the minimum SEER to 13 for eligibility of financing in October, 2005; approximately one year earlier. 23

31 Residential High Efficiency Furnace National Resources Canada (FEDERAL) Amendment 10 to Energy Efficiency Regulations Published: December 24, 2008 (Canada Gazette Part II) Effective date: December 31, 2009 On December 12, 2008 the Federal Government amended the Energy Act to require increased efficiency requirements for replacement gas (natural gas and propane) furnaces and boilers. Effective December 31, 2009 replacement furnaces up to Btu/h sold in Canada are required to have a minimum AFUE of 90%. Manitoba Hydro played a material role in the amendment of the Federal Energy Act. Manitoba Hydro staff assisted the Federal Government by providing technical and market data regarding the heating market in Manitoba and comments to the proposed Amendment during the consultation process. Power Smart Programs such as the Residential Loan and the High Efficiency Furnace and Boiler Rebate influenced the Manitoba market to the point that 80% of all equipment installed in 2009 was high efficiency products, thus making the Amendment acceptable to the industry and to consumers. The Energy Act (PROVINCIAL) Regulation 181/2009 Published: November 12, 2009 Effective date: December 30, 2009 On November 12, 2009 the Manitoba Government passed a regulation under the Energy Act to require increased efficiency requirements for replacement gas (natural gas and propane) furnaces and boilers. Effective December 30, 2009 replacement furnaces up to Btu/h sold in Manitoba are required to have a minimum AFUE of 92%. Manitoba Hydro played a major role in the development of the Provincial Regulation. Manitoba Hydro staff assisted the Province by providing technical and market data regarding the heating market, hosting an industry consultation with contractors and other interested parties, preparing a formal market impact study, and providing general guidance to regulatory staff. Power Smart Programs such as the Residential Loan and the High Efficiency Furnace and Boiler Rebate influenced the market to the point that 80% of all equipment installed in 2009 was high efficiency products, thus making regulation acceptable to the industry. 24

32 Commercial New Construction Building Code The national commitment to update the 1997 National Energy Code for Buildings (NECB) was initiated in Manitoba by the Energy Code Advisory Committee (ECAC) which was led by Manitoba Hydro. Manitoba Hydro also chaired the national Building Energy Code Collaborative (BECC), which was formed in response to the recommendations provided by ECAC. As a result of the work done by BECC, formal support was provided by jurisdictions across Canada to undertake the work to update the 1997 NECB and a national working group was formed to conduct the detailed work for updating the code. Manitoba s Minister of Labour provided formal support that signaled Manitoba s intention to adopt the document once published, however the Province still moved forward with their own energy strategy and convened a sub-committee of the Building Standards Board of Manitoba to recommend Manitoba-based energy and water efficiency recommendations that could be implemented in advance of the release of the 1997 NECB. In January 2011, the energy efficiency amendments developed for the Manitoba building code were approved by the Building Standards Board of Manitoba and the Minister of Labour. However, with the NECB already through its public consultation phase and targeting a release date of Fall 2011, it was decided to hold back on regulating the specific Manitoba amendments so that a review and implementation of the NECB could be implemented. The sub-committee that developed the Manitoba amendments was reconvened in fall of 2012 with the task of reviewing the NECB and determining its applicability to the Manitoba market. Once again, Manitoba Hydro played a key role with several Power Smart staff contributing to this process. The sub-committee provided a recommendation that was formally adopted with minor adjustments in the December of 2013 for implementation and enforcement in December of Manitoba Hydro staff continues to contribute to the national process for the development of the 2015 edition of the NECB and several Customer Engineering Services staff members formally attend regular code development meetings to ensure Manitoba Hydro objectives are met. Manitoba Hydro staff are also members of the Manitoba Building Standards Board Sub-Committee on Energy and Water Efficiency, which is responsible for recommending that the Province adopt the 2011 NECB and creation of additional recommendations specific to Manitoba that will be incorporated as amendments. 25

33 Commercial Lighting Since 1992, Manitoba Hydro has been actively promoting energy efficient lighting technologies for commercial applications. Activities involved in developing lighting standards include: - Collaboration with other utilities, identify necessary research - Work with Canadian Electrical Association - Liaise with manufacturers to encourage the development and improvement of energy efficient lighting - Product testing - Liaise with National Research Council - Participation on the CSA Standards Setting Committee - Participation on the Canadian Lighting Industry Collaborative General Service Lamps National Resources Canada (FEDERAL) Amendment 12B to Energy Efficiency Regulations Published: January 15, 2014 (Canada Gazette Part II) Effective date(s): January 1 st, to 100 watt equivalent lamps December 31 st, to 60 watt equivalent lamps The Government of Canada announced in Amendment 12B to the Energy Efficiency Regulations, published on January 15, 2014 that they would introduce Minimum Energy Performance Standards (MEPS) for general service lamps in The consequent Regulations came into force in December 2013 and applied to 100 and 75 W bulbs manufactured on or after January 1, 2014, and to 60 and 40 W bulbs manufactured on or after December 31, The Regulations prohibit the importation and interprovincial shipment of non-compliant products. The Regulations provide for a number of alternatives to inefficient bulbs. Where no alternatives exist, exemptions are made. Exit Signs National Resources Canada (FEDERAL) Amendment 8 to Energy Efficiency Regulations Test Standard: CAN/CSA-C Published: September 22, 2004 (Canada Gazette Part II) Effective date: November 1, 2004 In September of 2004, Natural Resources Canada's (NRCan's) Office of Energy Efficiency (OEE) amended Canada's Energy Efficiency Regulations (the Regulations) in order to strengthen the minimum energy performance standard for internally lighted exit signs with the publication of Amendment 8 in Canada Gazette Part II. This standard contains voluntary minimum performance standards of 22 watts for signs 120 V or less, and 27 watts for signs greater than 120 V. These levels were harmonized with the National Building Code of Canada. The standard also addresses the visibility performance of the exit sign. To meet these standards, typically requires that LED technology be employed. In the area of LED lighting, the program supported these minimum efficiency levels for new exit signs with signs set at a level that only LED exit signs could meet. 26

34 Fluorescent lamp ballasts National Resources Canada (FEDERAL) Amendment 9 to Energy Efficiency Regulations Test Standard: CAN/CSA-C654-M91 Published: November 15, 2006 (Canada Gazette Part II) Effective date(s): November 15 th, 2006 (New Construction Market) April 1 st, 2010 (Renovation Market) In November of 2006, Natural Resources Canada's (NRCan's) Office of Energy Efficiency (OEE) amended Canada's Energy Efficiency Regulations (the Regulations) in order to strengthen the minimum energy performance standard for florescent lamp ballasts with the publication of Amendment 9 in Canada Gazette Part II. Manitoba Hydro s lighting initiative helped support this Federal code change that required fluorescent lamp ballasts meet a prescribed minimum energy performance standard in the new construction market in 2006 and the renovation market in Other Commercial Equipment Commercial High Efficiency Furnace National Resources Canada (FEDERAL) Amendment 10 to Energy Efficiency Regulations Published: December 24, 2008 (Canada Gazette Part II) Effective date: December 31, 2009 On December 12, 2008 the Federal Government amended the Energy Act to require increased efficiency requirements for replacement gas (natural gas and propane) furnaces and boilers. Effective December 31, 2009 replacement furnaces up to Btu/h sold in Canada are required to have a minimum AFUE of 90%. Manitoba Hydro played a material role in the amendment of Canada s Energy Efficiency Act. Manitoba Hydro staff assisted the Federal Government by providing technical and market data regarding the furnace market in Manitoba and comments to the proposed Amendment during the consultation process. Power Smart programs such as the Power Smart Residential Loan, the Residential High Efficiency Furnace and Boiler Rebate, and the Commercial HVAC Program - High Efficiency Furnace incentive all influenced market adoption; increasing market penetration of high efficiency furnaces in Manitoba commercial buildings from the pre-program average of 30% to 75% at program termination. Manitoba Hydro s involvement has expedited market transformation and thus facilitated the adoption of the federal efficiency regulation. 27

35 The Energy Act (PROVINCIAL) Regulation 181/2009 Published: November 12, 2009 Effective date: December 30, 2009 On November 12, 2009 the Manitoba Government passed a regulation under the Energy Act to require increased efficiency requirements for replacement gas (natural gas and propane) furnaces and boilers. Effective December 30, 2009 replacement furnaces up to Btu/h sold in Manitoba are required to have a minimum AFUE of 92%. Manitoba Hydro played a material role in the development of the provincial efficiency regulation. Manitoba Hydro staff assisted the Manitoba Government by providing technical and market data, hosting an industry consultation with contractors and other interested parties, preparing a formal market impact study, and providing general guidance to regulatory staff. Power Smart programs such as the Residential Loan, the Residential High Efficiency Furnace and Boiler Rebate, and the Commercial HVAC Program - High Efficiency Furnace incentive all helped to expedite market adoption of high efficiency furnaces in Manitoba commercial buildings from the pre-program average of 30% to 75% at program termination. Manitoba Hydro s active involvement had expedited market transformation, and thus facilitated the adoption of the provincial efficiency regulation. Commercial Boilers National Resources Canada (FEDERAL) Bulletin published: August 2010 Test Standard: HI BTS 2000, Rev Method to Determine Efficiency of Commercial Space Heating Boilers Proposed Effective date(s): March, 2015 (90% Min Efficiency Rating - New Construction Market) March, 2015 (85% Min Efficiency Rating - Existing Buildings Market) In August of 2010, Natural Resources Canada's (NRCan's) Office of Energy Efficiency (OEE) Natural Resources Canada (NRCan) proposed to amend Canada s ENERGY EFFICIENCY REGULATIONS (the Regulations) to require dealers to comply with minimum energy performance standards (MEPS) for commercial gas and oil-fired boilers, imported or shipped inter-provincially, for sale or lease in Canada. NRCan proposes that commercial packaged boilers meet minimum efficiency ratings of 90% for the New Construction mark and 85% for the Replacement Market, effective March, Manitoba Hydro proposes that the Provincial Government enact regulations under The Energy Act, requiring a minimum performance level for all natural gas boilers sold to new Manitoba buildings. By April , Manitoba Hydro proposes that all commercial boilers be condensing, with a minimum efficiency rating of 90%. This regulation is equivalent to the proposed federal regulation, but will be enacted two years earlier. 28

36 Manitoba Hydro will play a material role in the development of a provincial efficiency regulation for commercial natural gas boilers. Manitoba Hydro staff will assist the Manitoba Government by providing technical and market data, hosting an industry consultation with contractors and other interested parties, preparing a formal market impact study, and providing general guidance to regulatory staff. The Commercial HVAC Program will continue to expedite market adoption of high efficiency boilers in all commercial buildings from it pre-program average of 30% to an estimated 72% by April 2013, thus facilitating the adoption of a provincial performance standard two years earlier than the rest of Canada. Manitoba Hydro proposes that the Provincial Government enact regulations under The Energy Act, requiring a minimum performance level for all natural gas boilers sold to existing Manitoba buildings. By March 2015, Manitoba Hydro proposes that all commercial boilers be condensing, with a minimum efficiency rating of 90%. This is approximately 5% higher than the proposed federal regulation requiring all boilers sold to be at least 85% efficient (near-condensing). Manitoba Hydro will play a material role in the development of a provincial efficiency regulation for commercial natural gas boilers. Manitoba Hydro staff will assist the Manitoba Government by providing technical and market data, hosting an industry consultation with contractors and other interested parties, preparing a formal market impact study, and providing general guidance to regulatory staff. The Commercial HVAC Program will continue to expedite market adoption of high efficiency boilers in all commercial buildings from it pre-program average of 30% to an estimated 75% by March 2015, thus facilitating the adoption of a higher performance standard in Manitoba. Commercial Pre Rinse Spray Valve Manitoba Plumbing Code Regulation 32/2011 Adoption of National Plumbing Code of Canada 2010 Published: March 28, 2011 The Buildings and Mobile Homes Act (C.C.S.M. c. B93) Effective date: April 1, 2011 On April 1, 2011 the Manitoba Government repealed the Manitoba Plumbing Code, Manitoba Regulation 128/2006 and adopted the National Plumbing Code of Canada 2010 issued by the Canadian Commission on Buildings and Fire Codes, National Research Council Canada. The code states that the maximum flow rate for a pre-rinse spray valve not exceed 6.1 litres per minute (1.60 gallons per minute). The Power Smart Rinse & Save Program influenced market adoption; converting the Manitoba market to pre-rinse spray valves with equal or higher energy efficiency than the code. Manitoba Hydro s involvement has expedited market transformation and thus facilitated the adoption of the code. 29

37 At an Industrial level, Manitoba Hydro undertakes codes and standards development work with the following organizations: - Natural Resources Canada (NRCAN) - Province of Manitoba - Canadian Standards Association (CSA), including BC Hydro, Hydro Quebec, Ontario Power Authority, Ontario Ministry of Energy, etc) - Centre for Energy Advancement through Technological Innovation (CEATI) - US Department of Energy (DOE) - Institute of Electronic and Electrical Engineers (IEEE) - International Electrotechnical Commission (IEC) - American Council for an Energy-Efficient Economy (ACEEE) - Electric Power Research Institute (EPRI) - Energy Solutions Center (ESC) - American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE) - Canadian Gas Association (CGA) This work pertains primarily to industrial and commercial equipment that incorporates or applies to electric motors, variable speed drives, air compressors, compressed air systems, fans, pumps, transformers, power quality systems, battery charges, uninterruptible power supplies, lighting systems, refrigeration, heating, ventilation and air conditioning systems, and building envelope incorporating both natural gas and electric supply. Areas of involvement include, test methods for determination of energy efficiency, performance standards, application guides for efficiency test methods and performance standards and repair standards (to maintain efficiency). Industrial codes and standards are often developed as nonregulated mechanisms designed to support good practices in the selection, operation and maintenance of energy consuming measures. As such, these codes and standards are incorporated into Manitoba Hydro s Industrial Power Smart programs supporting the savings objectives of these programs. 30

38 Appendix 8.1

39 2.2 DSM Utility Investment Internal Sources The following table provides the cumulative electric and natural gas internal DSM investment totals to 2028/29 broken down by market sector and cost basis. Including other internal DSM investments, it is expected that by 2028/29, an additional cumulative investment amount of $978 million dollars will have been spent on Power Smart programs and initiatives. Including investments to date, it is expected that by 2028/29, a cumulative investment of achieving the energy savings will have been $1.6 billion dollars. Internal DSM Utility Investment 2014/ /29 Electric Cumulative Utility Costs (Millions 2014$) Natural Gas Cumulative Utility Costs (Millions 2014$) Total Cumulative Utility Costs (Millions 2014$) Residential New Home Program $2.3 $0.1 $2.4 Home Insulation Program $16.6 $15.4 $32.0 Water and Energy Saver Program $5.0 $3.2 $8.2 Affordable Energy Program Affordable Energy Program - Insulation $16.7 $35.6 $52.4 ** Affordable Energy Program - Furnace n/a $19.3 $19.3 ** Affordable Energy Program - Total $16.7 $54.9 $71.7 ** Refrigerator Retirement Program $6.6 $0.0 $6.6 Residential LED Lighting Program $1.9 $0.0 $1.9 Community Geothermal Program $21.1 $0.0 $21.1 Opower (Behavioral) $0.0 $0.0 $0.0 Residential Programs Total $ % $ % $ % Commercial Commercial Lighting Program $92.3 $0.0 $92.3 LED Roadway Lighting Conversion Program $40.4 $0.0 $40.4 Commercial Building Envelope - Windows Program $11.8 $6.7 $18.5 Commercial Building Envelope - Insulation Program $12.6 $20.9 $33.5 Commercial Geothermal Program $47.6 $0.0 $47.6 Commercial HVAC Program - Boilers n/a $2.4 $2.4 Commercial HVAC Program - Chillers $2.0 $0.0 $2.0 Commercial HVAC Program - CO2 Sensors $0.5 $1.9 $2.4 Commercial HVAC Program - Water Heaters n/a $0.9 $0.9 Commercial Custom Measures Program $10.1 $3.2 $13.3 Commercial Building Optimization Program $4.2 $4.4 $8.6 New Buildings Program $17.2 $3.7 $20.9 Commercial Refrigeration Program $8.8 $0.0 $8.8 Commercial Kitchen Appliance Program $0.2 $0.5 $0.7 Network Energy Management Program $0.7 $0.0 $0.7 Internal Retrofit Program $2.5 $0.1 $2.6 Power Smart Shops $1.5 $0.1 $1.7 Commercial Programs Total $ % $ % $ % Industrial Performance Optimization Program $143.4 n/a $143.4 Natural Gas Optimization Program n/a $2.3 $2.3 Industrial Programs Total $ % $2.3 2% $ % Energy Efficiency Subtotal $ % $ % $ % Load Management Curtailable Rate Program $89.3 n/a $89.3 Load Management Programs Total $ % n/a 0% $ % Load Displacement & Alternative Energy Bioenergy Optimization Program $10.2 $0.8 $11.0 Customer Sited Load Displacement $84.3 n/a $84.3 Load Displacement & Alt. Energy Programs Total $ % $0.8 1% $ % Conservation Rates Conservation Rates - Residential $15.6 n/a $15.6 Conservation Rates - Commercial $18.4 n/a $18.4 Conservation Rates Total $34.1 5% n/a 0% $34.1 4% Fuel Choice Fuel Choice $49.4 $0.0 $49.4 Fuel Choice Total $49.4 7% $0.0 0% $49.4 6% Program Impacts Total $ % $ % $ % Program Support and Contingency Costs $87.2 $34.3 $121.4 Power Smart Investment Total, 2014/ /29 $820.5 $155.8 $976.2 Other Internal DSM Investments Afforedable Energy Fund $1.1 $0.7 $1.8 Cumulative Investment Total, 2014/ /29 $821.5 $156.5 $978.0 Spent to 2013/14 $461.0 $123.6 $584.6 Cumulative Investment Total, 1989/ /29 $1,282.5 $280.1 $1,562.6 ** Includes all Affordable Energy Fund Expenditures and Furnace Replacement Program 31

40 The following table outlines the total projected DSM budget including all internal sources of funding to 2028/29. A total investment of $978 million is planned for the period of 2014/15 to 2028/29. Forecasted Internal DSM Budget 2014/ /29 (Millions 2014 $) 2014/ / / / / / / / / / / / / / /29 Total Electric DSM Electric Power Smart Affordable Energy Fund Annual Electric Budget $53.6 $59.6 $74.4 $79.4 $86.9 $71.3 $64.9 $53.6 $43.4 $42.2 $39.7 $39.6 $38.0 $37.2 $37.3 $821.3 Natural Gas DSM Natural Gas Power Smart Affordable Energy Fund Furnace Replacement Budget Annual Natural Gas Budget $16.1 $16.4 $14.8 $12.1 $11.1 $11.1 $10.5 $9.9 $9.5 $9.1 $8.6 $8.6 $8.6 $5.1 $5.0 $156.5 Oil and Propane DSM Affordable Energy Fund Annual Oil and Propane Budget $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.3 Manitoba Hydro Annual Budget $69.7 $76.1 $89.2 $91.5 $98.0 $82.4 $75.4 $63.5 $52.8 $51.4 $48.4 $48.3 $46.6 $42.3 $42.4 Cumulative Investment 2014/ /29 $69.7 $145.8 $235.0 $326.5 $424.5 $506.9 $582.3 $645.9 $698.7 $750.1 $798.4 $846.7 $893.3 $935.7 $978.0 $978.0 Note: Figures may not add due to rounding Including investments to date, it is expected that by 2028/29, a cumulative investment of achieving the energy savings will have been $1.6 billion dollars, $1.3 billion of the costs are funded through the Corporation s Power Smart electricity budget, $232 million from the Power Smart natural gas budget, $37 million from the Affordable Energy Fund, and $27 million from the Furnace Replacement budget for targeting furnace replacement. Total Internal DSM Budget 1989/ /29 (Millions 2014 $) Expenditures to date 1989/ /14 15 yr planning horizon 2014/ /29 Total 1989/ /29 Electric DSM Electric Power Smart ,267.0 Affordable Energy Fund Annual Electric Budget $460.5 $821.3 $1,281.8 Natural Gas DSM Natural Gas Power Smart Affordable Energy Fund Furnace Replacement Budget Annual Natural Gas Budget $123.6 $156.5 $280.1 Oil and Propane DSM Affordable Energy Fund Annual Oil and Propane Budget $0.5 $0.3 $0.7 Cumulative Investment 1989/ /29 $584.6 $978.0 $1,562.6 Note: Figures may not add due to rounding 32

41 Affordable Energy Fund The Affordable Energy Fund is an internal fund established as a result of the Winter Heating Cost Control Act. The purpose of the Fund is to provide support for programs and services that achieve specific objectives outlined under the Act including encouraging energy efficiency and conservation through programs and services for rural and northern Manitobans, low income customers and seniors and encouraging the use of alternative energy sources such as renewable energy. Manitoba Hydro established the Affordable Energy Fund following the passing of the Winter Heating Cost Control Act on November 20, 2006 in the Manitoba Legislature. The Affordable Energy Fund supports Manitoba Hydro s sustainable development initiatives. The following projects and associated funding levels have been approved for support by the Affordable Energy Fund. As of March 31 st, 2013 approximately $26.8 million of the Affordable Energy Fund had been spent, leaving the remaining $11.2 million. Affordable Energy Fund Budget (Millions $) Total Budget Expeditures to Date Remaining Total Budget Affordable Energy Program Geothermal Support Community Support and Outreach Oil and Propane Heated Homes Special Projects Residential ecoenergy Audits Oil and Propane Furnace Replacement Solar Water Heaters Power Smart Residential Load Oil and Propane Heated Homes - Additional funding Spruce Wood Loggers Community Energy Development ecoenergyprogram Funding Power Smart PAYS Financing Program Subtotal $35.0 $24.5 $10.5 Energy & Resource Fund * Manitoba Electric Bus * FortWhyte EcoVillage * Diesel Community Green Pilot Demonstration * Métis Generation Fund * TOTALS $38.0 $26.8 $11.2 Note:* Non Demand Side Management Budget Figures may not add due to rounding 33

42 The following table identifies the programs and associated funding levels that the Affordable Energy Fund will support over the Power Smart Planning horizon. Affordable Energy Fund Budget (Millions 2014 $) 2014/ / / / / / / / / / / /29 Total Affordable Energy Program Geothermal Support Community Support and Outreach Oil and Propane Heated Homes Special Projects 0.0 Residential ecoenergy Audits Oil and Propane Furnace Replacement Solar Water Heaters Power Smart Residential Load Oil and Propane Heated Homes - Additional funding Spruce Wood Loggers Community Energy Development ecoenergyprogram Funding Power Smart PAYS Financing Program Subtotal $4.7 $4.1 $1.3 $0.1 $0.1 $0.1 $0.1 $0.0 $0.0 $0.0 $0.0 $10.5 Energy & Resource Fund * Manitoba Electric Bus * FortWhyte EcoVillage * Diesel Community Green Pilot Demonstration * Métis Generation Fund * Annual Budget Cumulative Budget, 2014/ /29 $5.3 $9.4 $10.7 $10.8 $10.9 $11.0 $11.0 $11.1 $11.1 $11.1 $11.2 $11.2 Note: Annual interest accruals are not included in the above forecast Figures may not add due to rounding Affordable Energy Program The Affordable Energy Fund supports the Affordable Energy Program by targeting low-income Manitobans through an individual, community and neighbourhood approach. Geothermal Support The Affordable Energy Fund provides funding to support the application of geothermal technology. A portion of the fund is being used to subsidize the interest rate for Residential Earth Power Loan program participants from 6.5% to 4.9% for the first five years of the loan term. Community Support and Outreach The Affordable Energy Fund provides funding for additional resources for the purpose of encouraging rural and northern customers to participate in Power Smart initiatives. Oil and Propane-Heated Homes The Affordable Energy Fund provides incentives to allow customers with wood, oil or propane heating to participate in Power Smart programs. The estimated savings of the other fuel types resulting from the installation of insulation in customer homes are provided in the next section of this report. (Note: Additional funding provided through the special projects category) Special Projects Residential Energy Assessment Service (ecoenergy Audits) The Affordable Energy Fund contributes the incremental costs associated with providing Manitoba Hydro s In-home Energy Assessment service under the Federal ecoenergy Retrofit program to rural and northern Manitobans. 34

43 Oil & Propane Furnace Replacement Manitoba Hydro extended the eligibility for the Power Smart Furnace Replacement Program to those customers upgrading an oil or propane furnace to a high efficiency electric or natural gas furnace. Residential Solar Water Heating Program Manitoba Hydro is partnering with Natural Resources Canada to deliver a residential solar water heating initiative in Manitoba. This initiative supports the application of solar domestic hot water pre-heating systems and the development of the local solar industry. Power Smart Residential Loan The Affordable Energy Fund provides funding to reduce the interest rate for the Power Smart Residential Loan from a cost recovery rate of 5.5% to a rate of 3.9%. Oil and Propane-Heated Homes Additional Funding This initiative provides further funding to extend the eligibility of Power Smart programs to include homes currently heated by a source other than electricity and natural gas. As this additional funding is coming from a separate Affordable Energy Fund category than the original funding, it is tracked separately. Spruce Wood Loggers This initiative provides funding to support Spruce Wood Loggers in upgrading their operations to include pelletizing ground wood and waste sawdust material. The pellets would provide an alternative fuel for coal-fired boilers and potentially prevent some customers in close proximity to Spruce Wood Loggers from converting to electric boilers. Community Energy Development ecoenergy Program Funding Additional Funding Additional funding has been allocated to support the cost of offering audits in Manitoba, involving a $100 subsidy for each audit plus the incremental cost of offering audits in rural and northern Manitoba. Power Smart PAYS Financing Program This initiative provides funding to reduce the interest rate for the PAYS financing program from the cost recovery rate to a rate of 3.9%. Energy and Resource Fund The Affordable Energy Fund provided funding to the Energy and Resource Fund. Managed by the First Peoples Economic Growth Fund, this joint initiative between the Government of Manitoba and the Assembly of Manitoba Chiefs was created to maximize First Nations participation in Major Energy and Resource Projects. Manitoba Electric Bus Funding is provided to support the Manitoba Electric Bus Project; a joint initiative among the Province of Manitoba, Manitoba Hydro, Red River College, New Flyer Industries and 35

44 Mitsubishi Heavy Industries. The objective of the project is to develop a commercially viable all-electric bus design with near-zero emissions for use in urban transit systems. FortWhyte EcoVillage The Affordable Energy Fund supported the research and design of a world-class ecovillage on land belonging to FortWhyte Alive. Diesel Community Green Pilot Demonstration This initiative provides funding to support a pilot demonstration focusing on green technologies in one of four diesel communities. Métis Generation Fund for Resource & Energy Development The Affordable Energy Fund is providing funding to the Métis Generation fund, managed by the Métis Economic Development Organization. This fund was created to enable Metisowned businesses in Manitoba to invest in business growth and development within the resource and energy sectors in Manitoba. Furnace Replacement Budget The Furnace Replacement budget is an internal allocation established as a result of Public Utility Board Order 99/07. The purpose of the allocation is to establish and administer a Furnace Replacement Program for low income customers. The following table outlines the planned additions and expenditures over the planning horizon. Furnace Replacement Budget (Millions 2014$) 2014/ / / / /29 Total Furance Replacement Budget Opening Balance 18.2 Annual Additions Annual Budget Annual Balance $18.2 $19.4 $20.5 $17.8 $6.4 $6.4 Note: Figures may not add due to rounding 36

45 2.2.2 External Sources Manitoba Hydro s Power Smart programs are supported by funding from external organizations as outlined in the following table. The Affordable Energy Program includes partnership funding from the Provincial Government. This external funding is expected to total $2.5 million over the period of 2014/15 to 2028/29. External Funding Budget 2014/ /29 (Millions 2014 $) 2014/ / / / /29 Total External Funding Affordable Energy Program Cumulative Budget, 2014/ /29 $0.5 $1.0 $1.3 $2.5 $2.5 Note: Figures may not add due to rounding 37

46 Appendix 8.1

47 2.3 DSM Metrics and other related measurements Integrated Perspective Metrics The following table outlines the cost effectiveness, from an integrated perspective, of the program offerings provided in the Power Smart Plan - 15 year supplemental report. Integrated DSM Metrics 2014/ /29 Combined DSM Electric DSM Natural Gas DSM SC TRC SC TRC TRC NPV LRC ( /kw.h) SC TRC TRC NPV LRC ( /m 3 ) Residential New Home Program $ ($1.0) 30.9 w c Home Insulation Program $ $ Water and Energy Saver Program $ $ w Affordable Energy Program Affordable Energy Program - Insulation $ ($7.0) 44.5 ** w Affordable Energy Program - Furnace n/a n/a n/a n/a ($3.3) 49.0 ** Affordable Energy Program - Total $ ($10.2) 45.3 ** w Refrigerator Retirement Program $ ($4.7) 0.0 i Residential LED Lighting Program $ ($1.7) 0.0 i Community Geothermal Program $ $ Residential Programs Total $ $ Commercial Commercial Lighting Program $ ($5.5) 0.0 i LED Roadway Lighting Conversion Program $ n/a n/a n/a n/a Commercial Building Envelope - Windows Program $ $ Commercial Building Envelope - Insulation Program $ $ Commercial Geothermal Program $ n/a n/a n/a n/a Commercial HVAC Program - Boilers n/a n/a n/a n/a $ c Commercial HVAC Program - Chillers $ n/a n/a n/a n/a Commercial HVAC Program - CO2 Sensors $ $ Commercial HVAC Program - Water Heaters n/a n/a n/a n/a $ Commercial Custom Measures Program $ $ Commercial Building Optimization Program $ $ New Buildings Program $ ($5.9) 53.0 Commercial Refrigeration Program $ $ i Commercial Kitchen Appliance Program $ $ w Network Energy Management Program $ ($0.3) 0.0 i Internal Retrofit Program $ ($0.1) 13.0 Power Smart Shops $ ($0.1) 11.5 Commercial Programs Total $ $ Industrial Performance Optimization Program $ n/a n/a n/a n/a Natural Gas Optimization Program n/a n/a n/a n/a $ Industrial Programs Total $ $ Energy Efficiency Subtotal $ $ Load Management Curtailable Rate Program n/a n/a $32.2 n/a n/a n/a n/a n/a Load Management Programs Total n/a n/a $32.2 n/a n/a n/a n/a n/a Load Displacement & Alternative Energy Bioenergy Optimization Program $ $ Customer Sited Load Displacement $ n/a n/a n/a n/a Load Displacement & Alt. Energy Programs Total $ $ Conservation Rates Conservation Rates - Residential $ n/a n/a n/a n/a Conservation Rates - Commercial $ n/a n/a n/a n/a Conservation Rates Total $ n/a n/a n/a n/a Fuel Choice Fuel Choice $ $ Fuel Choice Total $ $ Program Impacts Total $1, $ Program Support and Contingency Costs ($59.9) ($25.4) - Program Impacts Total (Incl. Support and Contingency Costs) $1, $ Other Internal DSM Investments Affordable Energy Fund ($0.9) ($0.7) - Overall Portfolio Metric $1, $ Notes: ** Includes all Affordable Energy Fund Expenditures and Furnace Replacement Program AEP Electric - Total: Excluding AEF costs, SC is 5.8, TRC is 5.3, TRC NPV is $40.1M, and LRC is 2.5 /kw.h AEP Natural Gas - Total: Excluding AEF costs, without Furnace Replacement Program, SC is 1.1, TRC is 1.0, TRC NPV is $0.16M, and LRC is 33.4 /kw.h c Program assumption includes savings from Codes & Standards i Program reflects natural gas interactive effects w SC, TRC and TRC NPV include Water Savings Benefits 1) Overall portfolio metrics do not include Customer Service Initiatives / Financial Loan Programs 2) Overall portfolio LRC metric does not include Curtailable Rate Program 3) Overall portfolio metrics include all support, contingency and Affordable Energy Fund Expenditures and Furance Replacement Program 38

48 The following chart provides the Levelized Resource Cost of the electric program offerings in the Power Smart Plan - 15 year supplemental report. Levelized Resource Cost (Electric DSM) ( /kw.h) The following chart provides the Levelized Resource Cost of the natural gas program offerings in the Power Smart Plan - 15 year supplemental report Levlized Resource Cost (Natural Gas DSM) ( /m 3 )

49 Global Greenhouse Gas Emissions Reductions The following chart and graph depict the aggregate global greenhouse gas emissions reductions resulting from the electricity and natural gas DSM programs outlined in the Power Smart Plan - 15 year supplemental report, including greenhouse gas emission reductions resulting from Manitoba Hydro s Power Smart efforts since Global greenhouse gas emission reductions of 2.9 million tonnes are forecast to be achieved due to energy savings outlined in the Power Smart Plan. Annual CO 2 Reductions (tonnes) CO 2 Reductions - Electric 2,685,291 CO 2 Reductions - Natural Gas 205, /15 Power Smart Plan (2014/ /29) 2,891,191 CO 2 Reductions Achieved to Date - Electric 1,557,430 CO 2 Reductions Achieved To Date - Natural Gas 195,193 Savings Achieved to 2013/14 (1989/ /29) 1,752,623 Total Projected to 2028/29 4,643,814 Including reductions achieved to date, approximately 4.6 million tonnes are forecast to be realized due to Manitoba Hydro s Power Smart efforts by 2028/29. 5,000,000 4,500,000 4,000,000 Cumulative Greenhouse Gas Emissions Displaced by PS Programs 1989/ / million tonnes (tonnes of C02e per year) 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 - Natural Gas Electric 40

50 Additional Measureable Non-Energy Benefits As part of the Power Smart Plan - 15 year supplemental report, the following residential and commercial programs are expected to capture additional water saving benefits: - New Homes Program - Water and Energy Saver Program - Affordable Energy Program - Commercial Kitchen Appliance Program The following graph depicts cumulative water savings in litres and cumulative customer dollar savings from each of the above programs. It is estimated that savings of approximately 14 billion liters of water and $48 million in bill savings will be achieved from 2014/15 to 2028/29. (billions of litres) $0.1M B litres New Homes Program $28.7M Cumulative Water Benefits 2014/ / B litres Water and Energy Saver Program $6.7M 1.9 B litres Affordable Energy Program $12.1M 3.9 B litres Commercial Kitchen Appliance Program $35 $30 $25 $20 $15 $10 $5 $ (millions 2014 $) Cumulative Water Savings (litres) Cumulative Benefit (nominal dollars) When combined with savings to date, Power Smart programs are expected to save approximately 37 billion liters of water and $141 million by 2028/29. Cumulative Water Savings by PS Programs 2006/ / $ $ $120.0 (billions of litires) $100.0 $80.0 $60.0 $40.0 (millions 2014 $) 5.0 $ $0.0 Historic Water Savings (litres) Future Water Savings (litres) Cumulative Water Bill Reductions (2014 $) 41

51 2.3.2 Utility Perspective Metrics The following table outlines the cost effectiveness, from a utility perspective, of the program offerings provided in the Power Smart Plan - 15 year supplemental report. Utility DSM Metrics 2014/ /29 RIM NUB NPV Electric DSM Natural Gas DSM LUC ( /kw.h) RIM NUB NPV LUC ( /m 3 ) Residential New Home Program $ (110.8) ($7.7) 0.1 c Home Insulation Program $ (0.6) ($18.4) 12.6 Water and Energy Saver Program ($4.2) (0.6) ($4.9) 12.7 Affordable Energy Program Affordable Energy Program - Insulation $ (0.2) ($31.7) 41.7 ** Affordable Energy Program - Furnace n/a n/a n/a n/a 0.2 (0.1) ($17.3) ** Affordable Energy Program - Total $ (0.1) ($48.9) 55.3 ** Refrigerator Retirement Program 0.6 (0.7) ($10.8) $1.4 - i Residential LED Lighting Program ($1.2) $ i Community Geothermal Program ($7.7) $ Residential Programs Total ($3.8) (0.4) ($78.1) 20.9 Commercial Commercial Lighting Program ($22.3) $ i LED Roadway Lighting Conversion Program ($6.9) 3.3 n/a n/a n/a n/a Commercial Building Envelope - Windows Program $ (0.3) ($6.5) 12.4 Commercial Building Envelope - Insulation Program $ (0.3) ($19.5) 12.3 Commercial Geothermal Program ($4.1) 3.2 n/a n/a n/a n/a Commercial HVAC Program - Boilers (0.8) ($4.2) 4.5 c Commercial HVAC Program - Chillers 0.7 (0.7) ($2.9) 1.4 n/a n/a n/a n/a Commercial HVAC Program - CO2 Sensors $ (0.5) ($2.2) 7.3 Commercial HVAC Program - Water Heaters n/a n/a n/a n/a 0.6 (0.4) ($0.9) 11.6 Commercial Custom Measures Program $ (0.3) ($2.8) 12.1 Commercial Building Optimization Program ($1.1) (0.3) ($3.8) 13.0 New Buildings Program $ (0.2) ($3.9) 13.5 Commercial Refrigeration Program ($2.5) ($0.6) - i Commercial Kitchen Appliance Program $ (1.5) ($1.1) 3.7 Network Energy Management Program $ $0.0 - i Internal Retrofit Program $ ($0.1) 13.0 Power Smart Shops ($0.5) (0.7) ($0.1) 10.5 Commercial Programs Total $ (0.4) ($44.6) 10.8 Industrial Performance Optimization Program ($19.3) 2.6 n/a n/a n/a n/a Natural Gas Optimization Program n/a n/a n/a n/a 0.8 (0.5) ($3.2) 4.6 Industrial Programs Total ($19.3) (0.5) ($3.2) 4.6 Energy Efficiency Subtotal ($17.8) (0.4) ($125.8) 14.8 Load Management Curtailable Rate Program $32.2 n/a n/a n/a n/a n/a Load Management Programs Total $32.2 n/a n/a n/a n/a n/a Load Displacement & Alternative Energy Bioenergy Optimization Program $ (0.4) ($1.1) 4.2 Customer Sited Load Displacement $ n/a n/a n/a n/a Load Displacement & Alt. Energy Programs Total $ (0.4) ($1.1) 4.2 Conservation Rates Conservation Rates - Residential 0.8 (1.8) ($35.3) 0.8 n/a n/a n/a n/a Conservation Rates - Commercial $ n/a n/a n/a n/a Conservation Rates Total ($17.0) 0.7 n/a n/a n/a n/a Fuel Choice Fuel Choice $ $ Fuel Choice Total $ $ Program Impacts Total $ (0.4) ($126.9) 14.5 Program Support and Contingency Costs - - ($59.9) ($25.4) - Program Impacts Total (Incl. Support and Contingency Costs) $ (0.3) ($152.3) 18.5 Other Internal DSM Investments Afforedable Energy Fund - - ($0.9) ($0.7) - Overall Portfolio Metric $ (0.3) ($153.0) (4) Notes: ** Includes all Affordable Energy Fund Expenditures and Furnace Replacement Program AEP Electric - Total: Excluding AEF costs, RIM is 1.4, NUB is 3.8, NPV is $12.8M, and LUC is 1.3 /kw.h AEP Natural Gas - Total: Excluding AEF costs, without Furnance Replacement Program, RIM is 0.6, NUB is -1.1, NPV is -$9.3M, and LUC is 6.8 /m3 c Program assumption includes savings from Codes & Standards i Program reflects natural gas interactive effects 1) Overall RIM, NUB, and NPV portfolio metrics include Curtailable Rate Program and do not include Customer Service Initiatives / Financial Loan Programs 2) Overall LUC porfolio metric does not inlcude Curtailable Rate Program 3) Overall portfolio metrics include all support, contingency and Affordable Energy Fund Expenditures and Furance Replacement Program 4) Excluding the Affordable Energy Program, overall natural gas LUC is 13.5 /m3 42

52 The following chart provides the Levelized Utility Cost of the electric program offerings in the Power Smart Plan - 15 year supplemental report. 6.0 Levelized Utility Cost (Electric DSM) 5.0 ( /kw.h) The following chart provides the Levelized Utility Cost of the natural gas program offerings in the Power Smart Plan - 15 year supplemental report Levelized Utility Cost (Natural Gas DSM) ( /m3)

53 2.3.3 Customer Perspective Metrics The following table outlines the cost effectiveness, from a participating customer perspective, of the program offerings provided in the Power Smart Plan - 15 year supplemental report. Customer DSM Metrics 2014/ /29 Electric DSM Natural Gas DSM Payback PC PC NPV Payback PC PC NPV Residential New Home Program $ $4.4 w Home Insulation Program $ $22.8 Water and Energy Saver Program $ $20.7 ^ w Affordable Energy Program Affordable Energy Program - Insulation $ $23.0 ** w Affordable Energy Program - Furance n/a n/a n/a $13.8 ** ^ Affordable Energy Program - Total $ $36.8 ** ^ w Refrigerator Retirement Program $ ($5.8) Residential LED Lighting Program $ ($2.1) Community Geothermal Program $ $0.0 Commercial Commercial Lighting Program $ ($6.3) LED Roadway Lighting Conversion Program $13.0 n/a n/a n/a Commercial Building Envelope - Windows Program $ $9.0 Commercial Building Envelope - Insulation Program $ $30.6 Commercial Geothermal Program $48.8 n/a n/a n/a Commercial HVAC Program - Boilers $12.3 Commercial HVAC Program - Chillers $5.6 n/a n/a n/a Commercial HVAC Program - CO2 Sensors $ $5.3 Commercial HVAC Program - Water Heaters n/a n/a n/a $0.9 Commercial Custom Measures Program $ $3.1 Commercial Building Optimization Program $ $4.7 New Buildings Program $ ($2.4) Commercial Refrigeration Program $ $3.9 Commercial Kitchen Appliance Program $ $10.0 w Network Energy Management Program $ ($0.3) Internal Retrofit Program $ n/a n/a Power Smart Shops $ $0.0 Industrial Performance Optimization Program $176.0 n/a n/a n/a Natural Gas Optimization Program n/a n/a n/a $4.3 Load Management Curtailable Rate Program $0.0 n/a n/a n/a Load Displacement & Alternative Energy Bioenergy Optimization Program $ $2.8 Customer Sited Load Displacement $82.5 n/a n/a n/a Conservation Rates Conservation Rates - Residential $139.7 n/a n/a n/a Conservation Rates - Commercial $144.7 n/a n/a n/a Fuel Choice Fuel Choice $ $0.0 Overall Portfolio Metric n/a 2.5 $1,322.4 n/a 2.3 $154.7 Notes: ** Includes all Affordable Energy Fund Expenditures and Furnace Replacement Program ^ Program with nil or negative customer costs AEP Electric - Total: Excluding AEF costs, Payback is 2.7, PC is 4.3, and PC NPV is $27.3M AEP Natural Gas - Total: Excluding AEF costs, without Furnace Replacement Program, Payback is 10.7, PC is 1.4, and PC NPV is $7.7M w Payback, PC and PC NPV include Water Savings Benefits 44

54 Combined Customer Bill Reductions The following graph depicts customer bill reductions resulting from electric and natural gas programs outlined in the Power Smart Plan - 15 year supplemental report. Power Smart programs are expected to save participating customers an additional $15.1 million in 2014/15 alone, $191 million in 2028/29 and $1.7 billion cumulatively by 2028/29. (millions 2014$) $200.0 $180.0 $160.0 $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 -$20.0 Customer Bill Reductions by fuel type 2014/ / / / / / / / / / / / / / / / /29 Electric $13.3 $24.6 $39.3 $55.2 $75.7 $96.7 $113.8 $128.4 $137.9 $147.5 $154.7 $161.7 $168.4 $176.1 $184.2 Natural Gas $1.8 $3.8 $5.7 $4.4 $2.7 $.9 -$.7 -$2.3 -$1.0 $.3 $1.7 $3.1 $4.5 $5.4 $6.4 Annual $15.1 $28.4 $45.0 $59.7 $78.4 $97.7 $113.1 $126.1 $136.9 $147.9 $156.5 $164.8 $172.9 $181.6 $190.6 Cumulative $15 $43 $88 $148 $227 $324 $437 $563 $700 $848 $1,005 $1,169 $1,342 $1,524 $1,715 When combined with bill reductions to date, Power Smart programs are expected to save participating customers $277 million in 2027/28 and over $4.3 billion dollars cumulatively by 2028/29. $4.5 $4.0 $3.5 Cumulative Customer Bill Reduction 1989/ /29 $4.3 billion (billions 2014 $) $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $ / / / / / / / /29 Reductions to Date Future Reductions 45

55 PowerSmartPlan AnnualCapacitySavings(MW) Appendix 8.1 Note:Maynotaddupduetorounding.

56 PowerSmartPlan AnnualEnergySavings(GW.h) Appendix 8.1 Note:Maynotaddupduetorounding.

57 PowerSmartPlan AnnualUtilityCosts (000'sin2014$) Appendix 8.1 Note:Maynotaddupduetorounding.

58 PowerSmartPlan AnnualAdministrationCosts (000'sin2014$) Appendix 8.1 Note:Maynotaddupduetorounding.

59 PowerSmartPlan AnnualIncentiveCosts (000'sin2014$) Appendix 8.1 Note:Maynotaddupduetorounding.

60 Appendix 8.1

61 PowerSmartPlan AnnualCapacitySavings(MW) (SavingstoDate) (1989/902013/14) Appendix 8.1 Note:Maynotaddupduetorounding. *IncludessavingsforDowntownOfficeprojectbasedonplanningassumptions

62 PowerSmartPlan AnnualEnergySavings(GW.h) (SavingsToDate) (1989/902013/14) Appendix 8.1 Note:Maynotaddupduetorounding. *IncludessavingsforDowntownOfficeprojectbasedonplanningassumptions

63 PowerSmartPlan AnnualUtilityCosts (1989/902013/14) (000'sin2014$) Appendix 8.1 Lower Income First Nations Program Heat Recovery Ventilation Program Note:Maynotaddupduetorounding.

64 PowerSmartPlan AnnualProgramAdministrationCosts (1989/902013/14) (000'sin2014$) Appendix 8.1 Lower Income First Nations Program Heat Recovery Ventilation Program Note:Maynotaddupduetorounding.

65 PowerSmartPlan AnnualProgramIncentiveCosts (1989/902013/14) (000'sin2014$) Appendix 8.1 Lower Income First Nations Program Heat Recovery Ventilation Program Note:Maynotaddupduetorounding.

66 Appendix 8.1

67 PowerSmartPlan AnnualEnergySavings(millionm3) Appendix 8.1

68 PowerSmartPlan AnnualUtilityCosts (000'sin2014$) Appendix 8.1 Note:Maynotaddupduetorounding.

69 PowerSmartPlan AnnualProgramAdministrationCosts (000'sin2014$) Appendix 8.1 Note:Maynotaddupduetorounding.

70 PowerSmartPlan AnnualProgramIncentiveCosts (000'sin2014$) Appendix 8.1 Note:Maynotaddupduetorounding.

71 PowerSmartPlan AnnualEnergySavings (SavingstoDate) (millionm3) Appendix 8.1 Note:Maynotaddupduetorounding.

72 PowerSmartPlan AnnualUtilityCosts (2001/022013/14) (000'sin2014$) Appendix 8.1 Residential Solar Heat Recovery Ventilation Program Note:Maynotaddupduetorounding.

73 PowerSmartPlan AnnualProgramAdmininstrationCosts (2001/022013/14) (000'sin2014$) Appendix 8.1 Residential Solar Heat Recovery Ventilation Program Note:Maynotaddupduetorounding.

74 PowerSmartPlan AnnualProgramIncentiveCosts (2001/022013/14) (000'sin2014$) Appendix 8.1 Residential Solar Heat Recovery Ventilation Program Note:Maynotaddupduetorounding.

75 AppendixEProgramEvaluationCriteria NatureofElectricityandNaturalGasMarkets

76 ProgramCategories CustomerServicePrograms CostRecoveryPrograms FinancialLoanPrograms IncentiveBasedPrograms EnergyEfficientCodesandStandards

77 EconomicEffectivenessMetrics

78 IntegratedMetrics SocietalCost(SC)

79 TotalResourceCost(TRC) TotalResourceCostNetPresentValue(TRCNPV)

80 LevelizedResourceCost(LRC)

81 UtilityMetrics RateImpactMeasureCost(RIM) NetUtilityBenefit(NUB)

82 UtilityNetPresentValue(UtilityNPV) LevelizedUtilityCost(LUC)

83 CustomerMetrics SimpleCustomerPaybackCalculation(Payback) ParticipatingCustomerCost(PC)

84 ParticipatingCustomerCostNetPresentValue(PCNPV) OtherDSMProgramAssumptions MarketTransformation ParticipantReinvestment InteractiveEffects

85 Appendix 8.1

86 Power Smart Plan Supplemental Report 15yr (2014 to 2029) *Manitoba Hydro is a licensee of the Trademark and Official Mark.